TIDMAVO
RNS Number : 4882X
Advanced Oncotherapy PLC
22 February 2017
ADVANCED ONCOTHERAPY PLC
("Advanced Oncotherapy" or the "Company")
Financing agreement
Advanced Oncotherapy plc (AIM: AVO), the developer of next
generation proton therapy systems for cancer treatment, announces
it has secured a flexible and staged GBP26 million financing
agreement (the "Agreement") with Bracknor Investment Group
("Bracknor"), a Dubai-based investment firm.
The Agreement gives the Company the ability to issue a minimum
of GBP13 million in convertible loan notes (Minimum Requirement),
in tranches of GBP1.3 million each, up to a maximum, at the
Company's sole discretion, of GBP26 million over the next 24
months.
The ability to control the timing of each issuance beyond the
Minimum Requirement, the opportunity to reimburse the tranches
partly in cash (up to 50%) and its stepped nature, give the Company
great confidence in its relationship with Bracknor and its
willingness to support significant value creation, through
continued development and commercialisation of the LIGHT system.
The Company will continue to review any future fundraising options
on merit, while being able to rely on this Agreement to meet all
financing demands in the short to medium term.
Use of proceeds
Proceeds from the Agreement will be allocated to the Company's
projects, including the cost of installing the first LIGHT system
at Harley Street, the funding of the Company's pipeline and for
general working capital purposes.
Terms of the Agreement
- Minimum two year term;
- Unsecured convertible notes;
- Minimum of 10 tranches of GBP1.3 million of convertible loan
notes each, with the option - at the Company's sole discretion - to
draw down up to 10 additional tranches within two years;
- Each tranche must be converted into new or existing shares of
the Company within twelve months of issuance ("Conversion
Period");
o The Conversion Price will be equal to the lowest daily VWAP
(Volume Weighted Average Price) during the fifteen trading days
preceding issuance by Bracknor of a notice to convert (Conversion
Notice);
- Drawdown of notes can be requested, by the Company, subject to
(a) all previously issued convertible loan notes being converted at
the Conversion Price (see above), or (b) a period of twenty
business days having elapsed since the last issuance;
- Upon issuance of a tranche, Bracknor shall receive warrants to
purchase shares with an aggregate value equivalent to 20% of the
nominal value of each tranche. These warrants will be exercisable
for up to four years from issue;
o For the first tranche, the exercise price will be 130% of the
lowest of either (a) the lowest daily VWAP during the ten trading
days preceding the signing of the Agreement or (b) the lowest daily
VWAP of the 10 trading days preceding the request to issue the
first tranche;
o The exercise price of the subsequent warrants (i.e. bar the
first tranche), will be 130% of the lowest daily VWAP during the
five trading days immediately preceding the request to issue a new
tranche;
- Bracknor, with any concert parties, is prevented from
acquiring more than 29.9% of the Company's shares.
Options at Company's sole discretion
- While the Company commits to the Minimum Requirement, the
Company has the right to refuse up to two calls during the
term;
- Subject to compliance with the Minimum Requirement, the
Company shall control the timing and total number of tranches
issued;
- The Company has a further option to raise up to an additional
GBP26 million, on the same terms, for a potential total commitment
of GBP52 million, provided issuance of the initial GBP26 million
has occurred within the first two years. As outlined below, the
Company is also considering other sources of funding;
- The Company has the ability to redeem tranches for cash, upon
receipt of a Conversion Notice, for up to 50% of the total amount,
to limit possible dilution.
Fees
- The Company shall receive 95% of the nominal value of each tranche;
- A commitment fee of 3% of the nominal value of the total
initial commitment, payable in convertible loan notes. GBP40,000 of
this fee is payable immediately; the remaining GBP740,000 falls due
upon passing of the resolutions to be put to the General Meeting of
the Company, referred to below;
- A conversion fee equal to 3% of the nominal value of the notes
converted, payable in cash or shares at the Company's
discretion;
- A maximum of GBP40,000, excluding VAT, for legal and due
diligence fees incurred by Bracknor, payable in cash and/or
convertible loan notes.
First Tranche draw down and General Meeting
The first tranche will be drawn down with immediate effect and
is not subject to Shareholder approval; however drawdown of further
tranches will be subject to Shareholder approval at a General
Meeting of the Company where the Directors will seek the requisite
authorities to allot the new shares deriving from the conversion of
the loan notes and exercise of related warrants. The Company has
existing shareholder approval to issue up to 2,633,954 shares. The
Company will, in due course, send to Shareholders a circular
convening the General Meeting, which will also contain the
resolutions to be voted on. The circular will be made available on
the Company's website once posted.
Based on a warrant exercise price of 85p and conversion price of
65p, the Company would have to issue a total of up to 48.6 million
new shares to honour the Agreement, assuming all conversion fees
are paid in cash, and assuming the issuance of a maximum of 20
tranches.
Non-dilutive financing
Further to the update from Advanced Oncotherapy on 23 January
2017 on a non-dilutive financing plan, the Company can confirm that
this option remains in consideration, as does the Metric Capital
financing. The Company will update shareholders on further
developments at the appropriate time.
Investor presentations
As outlined in the announcement on 16 February 2017, the Company
will be hosting investor and analyst presentations in London on
Monday 6 March 2017 and in Zürich, Switzerland on Tuesday 7 March
2017 covering the Agreement, the development, commercialisation and
production of the LIGHT system and the key benefits and advantages
of proton therapy and of LIGHT.
To register and attend either presentation, or to receive
further information on Advanced Oncotherapy, please contact
Walbrook PR on 020 7933 8780 or email avo@walbrookpr.com.
Commenting, Nicolas Serandour, CEO of Advanced Oncotherapy,
said: "I am delighted that we have been able to finalise a flexible
funding partnership with Bracknor that helps us fund the
development of our first LIGHT system to completion, supports our
first installation in Harley Street, as well as underpinning our
plans to move into volume manufacturing and full commercialisation.
The flexibility to draw down further funds provides the Company
with the security needed to pursue our plans to deliver shareholder
value through the commercialisation of our unique proton therapy
technology."
Pierre Vannineuse, CEO & Founding Partner of Bracknor
Investment, commented: "AVO is a perfect match in our strategy to
provide solid funding partnerships with investment grade healthcare
companies across the world, allowing companies to focus on what
matters most: the commercial and scientific development of their
own technologies.
"The conditions and covenant we have given to Advanced
Oncotherapy are a clear indication of our belief in the future of
the enterprise. However, the potential for success is most notably
demonstrated by the world-leading partners who have teamed with
them, such as Thales, CERN - where the technology originated - and
Howard de Walden Estates (Harley Street), home to healthcare
providers of world-class renown, not to mention the world-leading
opinion leaders and managers who came together to build this
company.
"Not only do we see this as an opportunity to support a Company
at the forefront of a revolutionary field of proton beam therapy
for cancer with a solution that answers all current impediments,
but also as the opportunity to leverage our own contacts in the
Middle East to ensure the commercial success of the LIGHT system in
this region too."
For further information, please contact:
Advanced Oncotherapy plc www.avoplc.com
Nicolas Serandour, Chief Tel: +44 20 3617 8728
Executive Officer
Michael Sinclair, Executive
Chairman
Stockdale Securities (Nomad Tel: +44 20 7601 6100
& Joint Broker)
Antonio Bossi / David Coaten
Stifel Nicolaus Europe (Joint Tel: +44 20 7710 7600
Broker)
Jonathan Senior / Ben Maddison
Walbrook PR (Financial PR Tel: +44 20 7933 8780
& IR) or avo@walbrookpr.com
Paul McManus Mob: +44 7980 541 893
Anna Dunphy Mob: +44 7876 741 001
About Advanced Oncotherapy plc www.avoplc.com
Advanced Oncotherapy is a provider of particle therapy with
protons that harnesses the best in modern technology. Advanced
Oncotherapy's team "ADAM", based in Geneva, focuses on the
development of a proprietary proton accelerator called Linac for
Image Guided Hadron Therapy (LIGHT). LIGHT accelerates protons to
the energy levels achieved in legacy machines but in a unit that is
a quarter of the size and between a quarter and a fifth of the
cost. This compact configuration delivers proton beams in a way
that facilitates greater precision and electronic control which is
not achievable with older technologies.
Advanced Oncotherapy will offer healthcare providers affordable
systems that will enable them to treat cancer with an innovative
technology as well as better health outcomes and lower treatment
related side effects.
Advanced Oncotherapy continually monitors the market for any
emerging improvements in delivering proton therapy and actively
seeks working relationships with providers of these innovative
technologies. Through these relationships, the Company will remain
the prime provider of an innovative and cost-effective system for
particle therapy with protons.
About Bracknor www.bracknor.com
Bracknor is a Dubai-based investment firm with a track record of
investing in early stage and mid-sized companies located,
primarily, in Europe. Since its creation in mid-2015 Bracknor has
financed over 16 companies, for the most part in the healthcare
sector, providing them with the paramount capital and technical
support needed.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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